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Western Energy Services ups its bid for Savanna

Savanna Energy Services workers at a job site.

Savanna Energy Services Corp.

Western Energy Services Corp. has upped the ante in the takeover battle for Savanna Energy Services Corp.

Western said on Wednesday it has added a 21-cent-a-share cash sweetener to its friendly offer of 0.85 of a Western share for each Savanna share.

The increase puts the value of its bid at $254-million based on Wednesday market prices and adds some of the safety of cash, which is a feature of a hostile rival offer from Total Energy Services Inc. That bid is currently worth about $226-million.

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The bidding war among Calgary-based oil-field service providers has already generated plenty of heated rhetoric as Savanna has fought to secure a richer offer than the one Total launched in December. Western and Savanna announced their friendly deal last week.

Shares in Savanna jumped almost 9 per cent on the Toronto Stock Exchange after word of the sweeter bid.

"The original transaction with Western was financially, strategically and operationally superior to the hostile offer from Total and provided our shareholders a significantly greater ownership interest in what would be the second-largest drilling contractor and second-largest service rig contractor in Canada," Savanna chief executive officer Chris Strong said in a statement.

"The revised Western offer, which includes a firm 21 cents in cash per Savanna share, equivalent to a 10.1-per-cent increase in purchase price, is clearly superior to Total's hostile offer."

Total, whose bid is due to expire on March 24, has yet to say if it will best Western's latest offer or walk away for fear of overpaying. It said early this week that it had locked up support from shareholders with about 43 per cent of Savanna's stock, though Savanna has countered that the agreements stand only until there's a better deal on the table.

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About the Author
Mergers and Acquisitions Reporter

Jeffrey Jones is a veteran journalist specializing in mergers, acquisitions and private equity for The Globe and Mail’s Report on Business. Before joining The Globe and Mail in 2013, he was a senior reporter for Reuters, writing news, features and analysis on energy deals, pipelines, politics and general topics. More


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